Help & Advice

Negative Equity Car Finance

How much are you in negative equity by? We can help people who are in as much as £1000 (approx) negative equity but that's as high as we can go if i'm honest. It really depends upon what price you're buying your next car for and how it values with the finance company. Sometimes we can secure more than the car is up for sale.

Loans from us are secured against the new car so the funds wouldn't be transferred to you personally to clear the debt and find a new car. The supplying dealer would take your current car in part exchange and settle the finance.

I take it that you are employed, have a UK driving licence and some current clean credit? If so, please make an application and once approved we provide a no obligation quote and you can get a new car from any UK dealer. We'll try and secure you as much as possible but if you could scrape together as much deposit as possible that'll help the cause. Kind Regards, Rachel

I have negative equity on my current car, with a car loan would i be able to clear the debt on my existing car and go pick a new car with the rest of the loan?

Baz

Rachel Wilson Underwriting Manager

Answer

Hi Baz, thank you for your question.

How much are you in negative equity by? We can help people who are in as much as £1000 (approx) negative equity but that's as high as we can go if i'm honest. It really depends upon what price you're buying your next car for and how it values with the finance company. Sometimes we can secure more than the car is up for sale.

Loans from us are secured against the new car so the funds wouldn't be transferred to you personally to clear the debt and find a new car. The supplying dealer would take your current car in part exchange and settle the finance.

I take it that you are employed, have a UK driving licence and some current clean credit? If so, please make an application and once approved we provide a no obligation quote and you can get a new car from any UK dealer. We'll try and secure you as much as possible but if you could scrape together as much deposit as possible that'll help the cause. Kind Regards, Rachel

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Paragon

Representative example. Excellent Credit

Borrowing £7,500 over 48 months with a representative APR of 16.8%, an annual interest rate of 16.8% and a deposit of £0.00, the amount payable would be: £211.25 a month, with a total cost of credit of £2,640 and a total amount payable of £10,140.

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More related questions

I have a poor credit score plus negative equity of £600 on my current car. I have a deposit of £200 and have been accepted by 2 other lenders. Is it possible to get finance through you which would include the negative equity being settled? I am a tenant in full time employment.

Wayne Thomas

Rachel Wilson

Underwriting Manager

Answer

Hi Wayne, yes - we'd be able to get you approved too and settle off the £600 negative equity. We take part exchange's in swap as a business and can get you into any car you want. Please apply and we'll take it from there. Thanks for your question. Rachel

Answer correct as of March 2012

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Hi there, I have just switched jobs and I am in desperate need of a more economical car so am looking at purchasing a new vehicle. I would like to P/X my 2008 Impreza GB270 Saloon. Unfortunately I do have outstanding finance of £11,300 on the Impreza. The finance is with MotoNovo (all payments have been made on-time and no payments missed). I have contacted some dealers and have been offered between £7000 and £8000 for my Impreza but this leaves me with negative equity of between £3300 - £4300 and is proving impossible obtaining finance without putting down a big deposit (even MotoNovo can't help) - can you help?Many thanks, Marc

Marc Andrews

Rachel Wilson

Underwriting Manager

Answer

Hi Marc, we'd love to be able to help but with such a large settlement figure you'd have to at least place down a £2000 deposit to ease yourself out of your current tight situation. Sorry i can't be of more help - we can get you out of some negative equity but £3500 is to much for even us to deal with. Regards, Rachel

Answer correct as of May 2012

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Hi there, i have a settlement figure of £2300 and my car has been valued between £1100 and £1400. Can you help? Thanks

Dave

Rachel Wilson

Underwriting Manager

Answer

Hi Dave, we'd love to help and getting you out of your negative equity shouldn't be a problem as it's around the £1000 mark. Would you have any cash deposit to reduce the negative equity? £500 would help massively. Kind Regards, Rachel

Answer correct as of June 2012

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I have got a 2005 Renault Clio on finance and have had it for 2 and a half years out of a 5 year deal. However I have a child on the way and I need a bigger car, I owe more than what it is worth as well. What options if any do I have? I don't have the money to pay off the outstanding balance but I don't mind rolling over the negative equity to another car. I also unfortunately have a bad credit rating.

Lee

Rachel Wilson

Underwriting Manager

Answer

Hi Lee, you're in a perfect position to "VT" voluntary terminate your agreement. You're half way through so you can just hand the car back as long as you follow all the finance companies rules. Read through your agreement and call the finance company to find out what the details are. You won't have to pay the negative equity either. Let me know how you get on. If you can't hand the car back for whatever the reason we can still help you. Keep me posted. Rachel

Answer correct as of June 2012

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Hi, I am in a position whereby my current car finance still has £5.5k left and I need to upgrade my car as my job has changed and I need something smaller and more fuel efficient. Unfortunately I have negative equity and the main delaers will not approve finance due to the amount of negative I currently have. My credit rating is still poor but I have not missed a single payment on my car finance or any of my current utility suppliers for the past 4 years. Are you able to help?

Bernadette Patchett

Rachel Wilson

Underwriting Manager

Answer

Hi Bernadette, thank you for your question and apologies for the delayed response. Are you over 50% of the way through your finance agreement? If so, you may well be able to voluntary terminate your current agreement enabling you to just hand the car back without any charges. You'll need to read your agreement first and perhaps seek some free legal advice. If you can "VT" your agreement it will get you out of your current position without any charges or having to pay the difference between the outstanding amount owed and the cars value. Kind Regards, Rachel

Answer correct as of June 2012

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Hi, i sent a question yesterday. I currently have finance with another company, with 1 year left to run, i am unable to VT due to the nature of the agreement. I currently pay £220 per month with 12 payments left. The vehicle is valued at £1900 with the finance company offering a settlement figure of £2600. This leaves a proposed shortfall of around £800. Would i be able to get finance for a newer vehicle through yourselves to cover this.

Ivan Horsman

Rachel Wilson

Underwriting Manager

Answer

Hi Ivan, apologies for the delay in coming back to you. The answer is Yes! We will be able to cover the £800 negative equity you have in your vehicle and place the shortfall on top of your new car finance agreement. Do you have a deposit and have you got good, average or poor credit? Regards, Rachel

Answer correct as of July 2012

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I currently have a Vauxhall Corsa on a 46 month finance deal. I am 17 months into the agreement but due to having a baby in 7 weeks I need a bigger car. I was given a settlement figure of £4500 but the corsa has been valued at
£2500 leaving £2000 negitive equity plus my credit rating is low even though I have not missed a payment since taking the finance. Is this something you can help me with?

Nick

Rachel Wilson

Underwriting Manager

Answer

Hi Nick, £2000 is quite a lot of negative equity to cover. If you had good credit we may well have been able to cover that in a new deal however as you say you have average / poor credit we'll struggle to help to be honest. However, if you can put in £1000 cash deposit we will be able to get you approved and cover the remaining £1000 negative equity. Have a great weekend. Rachel

Answer correct as of July 2012

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Hi, I'm 32 months through a 60 month agreement, to be honest i'm bored of the car and want to upgrade, settlement figure is approx £4k according to Glass guide car is worth approx £3k part ex! Can i add the shortfall to a new agreement? Or should i 'VT' then start a fresh?? I've heard this can have negative effect on your credit history? can you help? I've got a good credit history and get 0% cards etc

Mark

Rachel Wilson

Underwriting Manager

Answer

Hi Mark, you should speak to your finance company and explore the VT route and ask about your credit history and whether it will effect your status or not. Each lender has different rules you see. If this isn't an option that you wish to explore then you will be able to cover the £1000 negative equity with a new agreement i'm certain of that.

Answer correct as of July 2012

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Hi, I have been provisionally accepted for finance by yourselves and have seen two cars that I wish to purchase. I am p/x my car but it will have about £1,500 negative equity. Can you help?

Angela Brown

Rachel Wilson

Underwriting Manager

Answer

Hi Angela, we can potentially help get you out of your negative equity. Do you have any cash deposit that will help the situation?

Answer correct as of August 2012

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Hello, my settlement figure is £5900 but my car is worth £3500. Can you help me get into a new car? Many thanks

Harvey Bolton

Rachel Wilson

Underwriting Manager

Answer

Hi Harvey, £2400 negative equity would be too much for us to cover to be honest. You'd need at least £1400 cash deposit to give us a chance of helping you. Would that be possible? KR, Rachel

Answer correct as of September 2012

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Hello, i have about £800 negative equity and a poor credit history. Can you get me finance on another car? Cheers, Lee

Lee A

Rachel Wilson

Underwriting Manager

Answer

Hi Lee, £800 negative equity is manageable to place into another deal so yes please apply when you have 5 minutes.

Answer correct as of September 2012

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Dear Rachel, I have a Renault Grand Scenic with finance of 23 months left to pay. Initial terms were 42 months. I would like to part exchange, but my settlement figure puts me about £1200-£1500 in negative equity. I went to a dealer who didn't really work the figures properly (no negotiation of price of the new vehicle) and just applied for car finance and I was turned down. My credit rating is poor, but I have never missed a payment on my car or loan payments. What options do I have? What do I need to be saying to the car dealers when negotiated a price for the new vehicle. My Renault is in below average condition and is costing too much to run. I am currently paying £205 a month and can't sustain this due to the saving in running cost, but I would like to get that monthly figure down with a car that I do like and is more economical to run.

Mimi

Rachel Wilson

Underwriting Manager

Answer

Hi Mimi, as you're over half way through your finance agreement have you thought of Voluntarily Terminating your agreement? This basically means that you can just hand your car back to your existing finance company as long as you have kept your repayments up to date. Is this the case? Please speak to your finance company and see if this is an option but beware as they can charge you if the condition of your car isn't great and if it hasn't been maintained or serviced at correct intervals. If this isn't an option we could potentially get you approved for finance with one of our lenders and we could try and get you into a more economical car for cheaper payments. Rachel :-)

Answer correct as of September 2012

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Hi, i have had my car on finance for a year, at the time of purchase i was told, coming up to a year, i could upgrade regardless of what was outstanding. Now i'm told that is not the case, settlement is around £3500, and the dealership is only willing to do £2500. My car is a BMW 318ti compact 2003. Since the dealership offered £2500, i would have thought it is worth around this much, and i would be able to put in a £500 cash deposit. Is there anything you can do to help? I desperately need a bigger vehicle.

Mak

Rachel Wilson

Underwriting Manager

Answer

Hi Mak, as you'll be placing in a £500 deposit this will leave you in approx £500 negative equity which we'll be able to tie up into a new deal so as long as we can get you approved we'll be able to help you out. Please make an application and provide me with your reference number when you have done so. We can take your current car off you and settle the finance just so you know. Kind Regards, Rachel

Answer correct as of October 2012

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Hi Rachel, thanks for your reply, in addition, the finance company I am with are willing to give me more finance as long as I can get this one settled, does this help?

Mak

Rachel Wilson

Underwriting Manager

Answer

Hi Mak, yes that helps but we could potentially do the same. Please make an application and let me know the reference number when you get chance.

Answer correct as of October 2012

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I still owe approx £5600 on my car finance and I still have about 16 months left on my agreement but my car is in negative equity and is costing me a fortune in repairs. Can I still upgrade?

Chris Eardley

Rachel Wilson

Underwriting Manager

Answer

Hi Chris, what is your car worth roughly (trade valuation)? If it's worth well below the £5600 settlement have you considered voluntarily terminating your agreement? You're obviously 50% of the way through your agreement so you have the right to hand the car back. It may well be worth a call to the finance company to discuss your rights. Just mention that you wish to VT your agreement. If this isn't an option for whatever reason and you're in less than £1000 negative equity we may be able to help you out by placing the negative equity into a new deal. Kind Regards, Rachel

Answer correct as of October 2012

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Hi, I have a Vauxhall corsa on finance. I have around £9500 left to pay but I think the car is only worth around £8750, if I'm in negative equity can the remaining £750 be added to the loan? Or will I need to find the money myself?

Luke

Rachel Wilson

Underwriting Manager

Answer

Hi Luke, depending upon your credit history and who we get you approved with we may be able to clear the £750 negative equity and place in into a new deal. Have you had any bids from local dealers on your current car? Rachel

Answer correct as of November 2012

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Hi Rachel, is it possible to part exchange my car which is on finance as it is to big for us, there may be negative equity as i have only had it a year??

Anthony

Rachel Wilson

Underwriting Manager

Answer

Hi Anthony, I hope you are having a good day. With regards to your vehicle you would need to firstly get a settlement figure from the finance company and then get a quote on your vehicle as a part exchange from a reputable dealer. Depending on the level of negative equity we may be able to tie it up in another deal on a different vehicle. Please make an application so we can look to get you approved first. Cheers, Rachel

Answer correct as of January 2013

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Hiya, I traded my finance car in for my new hire purchase car in september last year so only 4 months ago. It is a Vauxhall Tigra 1.3cdti which I love however I just found out I am pregnant so will eventually need a bigger car. Whould i be able to trade this in already. The car is worth 5k in perfect condition and i owe 9k to black horse.

Georgie

Rachel Wilson

Underwriting Manager

Answer

Hi Georgie thank you for your question and congratulations on your pregnancy. Unfortunately it seems like you have a large amount of negative equity in your vehicle. I would suggest that you get a quote on your vehicle from a reputable dealer and a settlement figure from the lender (this will proably be less than what you think as the interest will be reduced as you are settling earlier). We will then know exactly how much negative equity is in the car and can then look to see if we can tie it up into a new deal on a different car and use your current vehicle as a part exchange. I hope this helps. Rachel

Answer correct as of February 2013

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Hi,I have Hire Purchase on a Vauxhall Corsa and the remaining balance is exactly £10,000. I pay £192 per month and started this in March 2012. The opening balance was £11,538. As I need a car I want to continue on finance but pay less each month. Is it possible to part exchange the Corsa and get a cheaper car on finance? I was thinking that even if a dealership offered me £8K then could the remaining £2K get added onto a new plan on a cheaper car. For example, therefore I would be paying finance on maybe £6 or £7K? Do you have any other suggestions? Thanks, Chris

Christopher James

Rachel Wilson

Underwriting Manager

Answer

Hi Christopher, Thank you for your question, I apologise for the delayed response. Firstly I would advise that you get a settlement figure from the finance company as this should be less than the remaining balance as it reduces the interest. Then I would advise that you get a part exchange value on your existing vehicle from a reputable dealer. We can then assess the level of negative equity in the car and see if it would be possible to include it in a new agreement on a different vehicle (This is usually possible), however there is a chance you would require a deposit. Alternatively you can wait until you are half way through an agreement and opt to voluntary terminate and hand the vehicle back. Please make an application so we can see what we can do.

Answer correct as of February 2013

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I have a 54plate honda accord executive diesel, I think its worth about £2000, but I think I owe about £3000 ish, would you be able to get me into a new vehicle and how would that work. Thanks

Chris W

Rachel Wilson

Underwriting Manager

Answer

Hi Chris you would need to get a settlement figure from the finance company and a quote on your current vehicle from a reputable dealer. We can then see if we can tie any negative equity into a new agreement on a different vehicle (This is usually possible). Please make an application so we can see what we can do. Thanks Rachel

Answer correct as of February 2013

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I have a car on HP with which is negative equity. my settlement is 2200 and car is worth £1200 and £1400. I do not have a very good credit rating and work 24 hours a week. Will I be able to get a new car?

Rob

Rachel Wilson

Underwriting Manager

Answer

Hi Rob, if you find a cheap car we could possibly tie up your negative equity into a new deal. Please apply when you can.

Answer correct as of May 2013

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Hi,

I have a 58 plate Vauxhall Astra which I bought in Feb 2012 for £6000. I pay £253 a month and recently asked for a settlement amount which was £5793 and current dealership offers are between £4000 and £4800.

Could I get a better finance deal on a newer Vauxhall Insignia?

Daniel Dunne

Rachel Wilson

Underwriting Manager

Answer

Hi Daniel, thank you for your question.

If you can get £4800 for your current car it looks as though you're in £1000 negative equity. Would you have any cash at all to make up some of the difference as this would help us get you into a better deal?

We can help people who are in negative equity and if you've had a recent clean credit history i'd like to think we can get you a better rate than you're currently on. Please apply when you're ready and if approved you can choose a car from any dealer and we do provide a no obligation quote. Kind Regards, Rachel

Answer correct as of January 2014

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Hello, I have a 58 reg Volkswagen Passat highline with a settlement figure of £5803 and a dealership are offering me £4350 for my car.

They have a car in stock priced at £6485 which i would like to put on finance however, the car has 132000 on the clock. Is it possible to get financed on the new vehicle with this mileage and negative equity?

Carl Forman

Rachel Wilson

Underwriting Manager

Answer

Hi Carl, thank you for your question.

As you're £1450 in negative equity we'd struggle to cover all of this on a new agreement. Would you have any cash deposit at all to cover some of the difference (50%)?

Also, most lenders we deal with won't finance cars that have done over 100,000 miles so can you locate a car with lower mileage?

Please make an application when you're ready and once approved we provide a no obligation quote and you can buy a car from any dealer in the UK. Kind Regards, Rachel

Answer correct as of February 2014

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Hi Rachel, About 3 years ago I had a very poor credit rating and got a car through a known company with an APR of 49.9%, paying nearly £300 per month for a Vauxhall Astra.

I have paid for the car on time and with the miracle of great overtime rates I have settled most of the defaults that where on my account at the time and had satisfied a CCJ that I didn't even know was there, other bits of credit like a mobile phone contract is all in order, as to are my bank accounts.

In a nutshell, there are defaults on my report, but they are all mostly settled. What I am looking to do is trade my car down. The problem is, the settlement figure will be around £5,600 when I intend to do something and the car is probably worth between £4,000 and £4,500. (Vauxhall Astra Life CDTI 1.3 Diesel with about 75000 on the clock). I will have £1,500 cash deposit to utilise too. Would this be something you can help with?

I'm looking ideally to get my monthly outgoings down further. I've already done pretty well getting them as low as they are with I have, but I want more! Many Thanks.

Roger

Rachel Wilson

Underwriting Manager

Answer

Hi Roger, thank you for the detailed question.

By the sounds of things it seems you're in £1000 - £1500 negative equity however as you've had the car for more than 50% of the original agreement you are entitled to hand the car back to the finance company to clear this amount. You need to call your current finance company and inform them you wish to "VT" (Voluntarily Terminate) your current agreement.

They should advise you of the next steps but do ask about any charges as some companies sting customers after the car has been returned. This is the best way to get out of the current situation. You're then free to choose another car using you £1500 as full deposit towards a newer one on a better finance rate hopefully too.

Please make an application when you're ready and once approved you can choose a car from any dealer and we also provide a no obligation quote. Kind Regards, Rachel

Answer correct as of April 2014

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Hi there. I bought a Ford Focus about 18 months ago, never missed a payment, all on time. I went to a mainstream dealer to try and trade for a different car and got knocked back on finance. I have approx £1800 negative equity. Is this something you would be able to help me out with?
Many thanks

Nathan

Rachel Wilson

Underwriting Manager

Answer

Hi Nathan, thank you for your question.

We can help customers with negative equity by adding it onto a new finance deal, however the maximum most of our lenders will add is approximately £1000.

Apologies we can't help you with this. How long is your finance deal? If you are 50% of the way through your agreement or more you may be able to voluntarily terminate the deal. Have you considered this?

Kind Regards, Rachel

Answer correct as of September 2015

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Hi my mum is on PCP deal and has 3 years to , she has about £5000 in negative equity as she is only being offered 4500 for a 64 plate Fiat Punto. Is there anyway she can lower her payment as she is paying a lot per month for her car at the moment. We have considered a loan but we are looking for other options, thanks.

Ben Jackson

Rachel Wilson

Underwriting Manager

Answer

Hi Ben, thank you for your question.

We do work with a few lenders that can help with negative equity by adding this on to a new finance deal, however the maximum they will add is approximately £1000, so we wouldn't be able to help you on that front I'm afraid.

The only thing I can suggest is to wait until you are 50% of the way trough your agreement and opt for Voluntary Termination which is where you hand back the vehicle and end the finance agreement. As the agreement is PCP, this would entail you paying off 50% of the balloon payment on top of 50% of the monthly re-payments.

We compare products from 18 of the UK's top lenders to get you the best deal.

Hitatchi

Paragon

Representative example. Excellent Credit

Borrowing £7,500 over 48 months with a representative APR of 16.8%, an annual interest rate of 16.8% and a deposit of £0.00, the amount payable would be: £211.25 a month, with a total cost of credit of £2,640 and a total amount payable of £10,140.

CarFinance 247 is a broker and not a lender

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Licensed Credit Broker. All finance is subject to status and income. Written Quotation on request. CarFinance 247 can introduce you to a limited number of finance providers based on your credit rating and we will receive a commission for such introductions.

* The UK’s number one online car finance provider by web traffic. Based on Experian Hitwise data – 663,415 visits to CarFinance 247 vs 299,576 for nearest competitor. January 2017.

Carfinance247 Limited is authorised and regulated by the Financial Conduct Authority, registration number 653019 and we are registered with the Office of the Information Commissioner (No. Z1897658). Applicants must be 18 or over, terms and conditions apply, guarantees and indemnities may be required.

† We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your customer service specialist can provide more information on this.

Licensed Credit Broker. All finance is subject to status and income. Written Quotation on request. CarFinance 247 can introduce you to a limited number of finance providers based on your credit rating and we will receive a commission for such introductions.

* The UK’s number one online car finance provider by web traffic. Based on Experian Hitwise data – 663,415 visits to CarFinance 247 vs 299,576 for nearest competitor. January 2017.

Carfinance247 Limited is authorised and regulated by the Financial Conduct Authority, registration number 653019 and we are registered with the Office of the Information Commissioner (No. Z1897658). Applicants must be 18 or over, terms and conditions apply, guarantees and indemnities may be required.

† We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your customer service specialist can provide more information on this.